Industry Still Wary Of ICANN Plan For New Top-Level Internet Domains

By Liza Porteus Viana for Intellectual Property Watch
The Internet Corporation for Assigned Names and Numbers (ICANN) has not adequately explained to the world the need for more generic top-level domains (gTLDs – such as .com), industry representatives said last week.

As the time nears for ICANN, the internet’s technical oversight body, to publish draft guidelines (request for proposals) in the fourth quarter of 2008 for the gTLD applications, the chorus of criticism against the new domains is getting louder, with some saying it is merely a way for the global domain-name body to make money.

“ICANN to my mind has not effectively answered the question,” J. Scott Evans, former chair of ICANN’s Intellectual Property Constituency and senior legal advisor for Yahoo, said during an International Trademark Association webcast Thursday. “I think ICANN sees itself as a market builder,” at least some on the ICANN board do, he added, so they are in favour of opening up and building a competitive marketplace on the web.

“If that’s the view you take, then the more [gTLDs], the merrier. If you’re not, and you’re a trademark owner, all you see is a greater investment you have to take to these entities to protect your trademark from abuse,” Evans added.

Evans likened the issue to a ‘land grab’, where real-estate is so scarce, it leads to a rush on that land that makes it more valuable. But not everybody wins in that process, he said.

“The only thing we see here is more investment that we make initially up front to the owners and operators of these particular TLDs,” and more money spent by trademark owners to defend their brands against “nefarious uses.”

ICANN spokesman Jason Keenan told Intellectual Property Watch on Friday that it is important to understand that the policy process works from the bottom up, based on ideas from the broader internet community.

“The wider community that takes part in the ICANN process has said there should be the ability to apply for new gTLDs,” Keenan said when asked about the exact need for the gTLDs. “Those discussions have driven the policy development, and led to the work to establish a process for people to apply for new generic top-level domains.”

Torsten Bettinger, a panellist for the World Intellectual Property Organization’s Arbitration and Mediation Centre, said the new gTLDs will give end users more choice about the nature of their presence on the internet. Users may be able to use domain names in the language of their choice. There is also demand for additional top-level domains as a business opportunity (for example, Microsoft could have .msn, and Google could have .google).

“There will be no predefined number of gTLDs and the predictions are, there will already be hundreds of new gTLDs,” in the first round of applications, Bettinger told the 41st Congress of the International Association for the Protection of Intellectual Property (AIPPI) in Boston last week.

Since ICANN approved the new domain names in June, trademark owners have cited costs, confusion and cybersquatting as problems sure to skyrocket once the new gTLDs go live. Brand owners also say internet users are already frustrated over getting misdirected by cybersquatters who sometimes infect users’ computers with viruses and software to steal personal information – an activity many say surely will only increase.

“These harmful practices will now get worse,” Claudio Di Gangi, INTA’s manager for external relations, internet and the judiciary, wrote in an editorial last week.

“In the coming years, hundreds or thousands of new domain name suffixes could be approved, which will confuse consumers and raise new challenges for companies whose brands are already being exploited in the existing Internet domain space,” Di Gangi wrote. “Opening the floodgates of new website suffixes may certainly be profitable for ICANN, but brand owners, already suffering from the proliferation of trademark infringement on the Internet, will face increasing burdens.”

Experts say there is more cybersquatting on the horizon in the form of domain-name tasting – where people register a domain name and place pay-per-click ads on it for five days to gauge whether the names generate money.

Other activities likely to increase are: kiting (automatically registering, dropping and re-reregistering the domains so as to not have to pay for them); front-running (the practice of monitoring and stealing someone’s domain name search queries and registering the domain name before the original person can register it; and sniping (snatching up a domain name from the prior registrant the second the registration expires).

“There is a lot of money at stake in cybersquatting,” and also a lot of money to be lost by individuals and businesses, Mark Partridge, a Chicago copyright and trademark lawyer, told AIPPI.

ICANN Auction Details

ICANN has not yet printed new guidelines for new gTLD applicants, and the cost of the application fees is still just speculation ($100,000 to $150,000 is the latest estimate, although some have been as high as $250,000). Keenan said both the application fees and guidelines are still being developed. The request for proposals, subject to community input, are scheduled to be released this November, around ICANN’s meeting in Egypt.

But ICANN has released other details about how the process would work.

The organisation last month published a paper making the economic case for auctions as a tie-breaking mechanism in the case of resolving disputes over identical or confusingly similar applications for new gTLDs.

The paper says the auctions will increase efficiency through a transparent, objective and scalable process. It does not, however, address specific details on how they would resolve contentions among applicants for new TLD strings. ICANN is working with a design consultant on this issue.

“While auctions are not perfectly aligned with ICANN’s objectives, alternative allocation mechanisms such as comparative evaluations and lotteries inherently have much more severe limitations and defects, as evidenced by the historical record and by the abandonment of these alternatives in other communications areas,” the paper states.

ICANN on Thursday posted a summary of the 18 comments received on the paper during the month-long comment period, which ended on 7 September: 10 of the 18 were from individuals associated with potential gTLD applications or registries.

Several commenters noted that the paper does not describe a proposed auction model or outline the use of funds from the potential auction of gTLD strings. ICANN says these topics will be the subject of separate documents to be posted along with a proposed budget for the new gTLD process prior to the Cairo meeting.

Commenters also were concerned that the use of auctions would not meet the needs of community-based applicants or smaller TLDs intended for the public interest. Several acknowledged that the auction issue was complicated, and would be unlikely to satisfy everyone in the ICANN community.

“No final decision has been made,” Keenan said.

Meanwhile, ICANN announced Friday that as the result of the de-accreditation of registrar Esoftwiz Inc., accredited registrars are being sought to take over the 1,200 or so gTLD names managed by that company, which include registrations in the .com and .net registries. Those interested need to submit a written letter of interest to ICANN by 19 September.

Liza Porteus Viana may be reached at info@ip-watch.ch.